Stock perpetual futures will remain available on Kalshi, Coinbase Derivatives and Bitnomial for now, after a federal judge on Tuesday declined an emergency bid to halt the products — even as she concluded that the Wall Street-backed challengers are likely to prove the Commodity Futures Trading Commission (CFTC) overstepped its authority.

U.S. District Judge Valerie Caproni denied the request for a temporary restraining order on Nov. 3 (the court's order) after a teleconference with the parties, hours after the CFTC said the products could begin trading on U.S.-regulated exchanges.

The plaintiff is the Capital Markets Alliance Association, a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, according to a declaration from the group's secretary, Adam Ford. The association sued the CFTC and Chairman Michael S. Selig in the Southern District of New York, case No. 1:26-cv-09608 (complaint), seeking to unwind the approvals of the filings submitted by all three exchanges.

Caproni wrote that the group “is likely to succeed on the merits” of its claim that the agency lacks statutory authority to allow perpetual derivatives on individual stocks to be offered to retail investors on CFTC-regulated platforms.

“Because the perpetual contracts, by definition, do not provide for a ‘sale for future delivery of a single security,’ they cannot be a security future over which the CFTC has statutory and regulatory authority,” she wrote.

The contracts, she said, instead “appear to satisfy the definition of a swap,” a category that falls to the Securities and Exchange Commission (SEC). She also found that the balance of equities and the public interest favor the alliance, writing that the agency's actions “seem to represent a major disruption to the equities market.”

The emergency request did fail on one prong. A party seeking emergency relief in federal court must ordinarily satisfy four factors: likelihood of success on the merits, irreparable harm, the balance of equities and the public interest. Caproni described the declarations submitted by Cboe, Citadel Securities and Healthy Markets as “conjectural” about the harm their members would suffer, finding that they did not show irreparable harm that was “actual and imminent.”

What the Ruling Does and Does Not Do

The order leaves the approvals in place. It does not decide the case, nor the alliance's separate motion for a preliminary injunction. That motion is the next decision point, and to prevail on it the alliance will need to make the concrete showing of imminent harm that Caproni found missing from the emergency filings.

Under the timetable set out in the order, the CFTC's opposition is due Friday, Nov. 6, and the alliance's reply is due Tuesday, Nov. 10. The order notes that this schedule is subject to change by the assigned judge; the docket lists Judge Lorna G. Schofield as assigned to the case.

Kalshi was already listing four single-stock perpetuals — on Qualcomm, McDonald's, Amgen and Costco — by Wednesday morning, each with maximum leverage of 4.9 times. Bloomberg Law reported that the judge signaled she might ultimately side with the Wall Street firms opposed to the products.

A CFTC-SEC Turf Fight With Crypto Venues in the Middle

At its core, the fight is over a label. In a Nov. 3 statement, Selig said the contracts were deemed approved under Commission Regulation 40.3 as security futures products, a category the CFTC and SEC oversee jointly. The exchanges filed their contracts on Sept. 18, and the agency let its 45-day review period lapse without issuing a written order. The label matters because it determines which regulator, and which rulebook, governs the contracts.

The alliance argues that a contract with no expiration date and no delivery obligation is a security-based swap. Congress limited retail trading in such products to national securities exchanges under full SEC oversight. The group's complaint says the CFTC “invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction” of the SEC.

A CFTC spokesperson called the lawsuit “troubling” and told Reuters: “Our markets should be governed by law, not litigation campaigns intended to block innovation.”

For crypto-native venues, the stakes reach past stocks. Perpetual futures — a contract structure that originated in crypto markets — are the core product of crypto derivatives trading, and Kalshi and Coinbase have used the CFTC's framework to bring them onshore. The agency approved the first U.S.-listed bitcoin perpetual on May 29, and Kalshi went live with the product soon after.

That approval already faces a legal challenge of its own. CME Group sued the CFTC in June, arguing that a contract built on exchanged funding payments is a swap, not a future. That case remains pending in Washington.

The New York order covers security futures, not commodities like bitcoin. But a federal judge has now said, at least preliminarily, that a contract with no expiration date does not look like a future.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.